Comprehensive Tax Reform Kicks Off Lobbying Frenzy

Hundreds of corporations and business groups—from FedEx to Wal-Mart—have been spending millions of dollars on lobbying the Obama administration and Congress on comprehensive tax reform.

"What's the old adage? If you're not at the table, then you're probably on the menu?" suggests Lee Drutman, a senior fellow at the Washington-based Sunlight Foundation, a nonprofit, nonpartisan government-watchdog organization.

This table was set last fall, when Ways and Means Committee Chairman Dave Camp, R-Mich., announced unequivocally that his panel would write, mark up, and pass major tax-reform legislation in 2013. Then, Speaker John Boehner said overhauling the unwieldy tax code was one of the highest priorities.

The menu certainly holds implications for individual taxpayers. But for many corporations and other business groups, there are hopes—even expectations—of a cut in the corporate tax rate from 35 percent to as low as 25 percent. There is also a push for other moves, such as the repatriation of some offshore corporate profits. At the same time, businesses are eager to prevent a wide array of other things from happening, such as the closing of some existing loopholes.

The devil of any reform is in the details of what exactly will be targeted. Drutman's research has found that thousands of lobbyists are working to make sure roughly 2,000 client organizations wind up happy, and some of these efforts are employing high-profile former lawmakers.

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But gauging the depth of these lobbying efforts from the outside is difficult. Rep. Bill Pascrell, D-N.J., a Ways and Means member, says he's detected "no great change ... no special gnashing of teeth" in the intensity of lobbying on tax issues this year.

But he says that's because this lobbying sector is always busy and alert. That's particularly been the case in an era of eleventh-hour fiscal-cliff bills and last-second budget maneuvers.

Pascrell did say there seems to have been more direct involvement from lobbyists and stakeholders this time around through participation in the 11 separate tax-reform working groups the committee has used to research issues and get feedback.

The Center for Responsive Politics lists the contributions to Ways and Means members by political action committees and individual donors. Based on filings with the Federal Election Commission dating from January through Aug. 19 of this year, the site shows that the finance/insurance/and real estate sectors have been leading the way--giving about $3.8 million altogether to committee members. These groups are followed by the health sector, miscellaneous business interests, and organizations tied to energy and natural resources.

And in the last session, only two of the top 25 sectors with the most tax-related lobbying activity over 2011 and 2012 were not in some way tied to corporations looking for their own targeted benefits, according to Drutman's research for the Sunlight Foundation.

But lawmakers and lobbyists note there are other aspects to lobbying that might not necessarily show up in filings. Those range from underscoring the concerns of home-district businesses that might be impacted by tax decisions in Washington, to the impact for lawmakers on personal ties that can impact future job prospects in the revolving-door culture of Washington.

The lobbying on tax reform continues despite a growing skepticism that not much significant reform will actually take place this year.

Lawmakers and lobbyists alike say that next week's kickoff of a budget conference committee, to be cochaired by House and Senate Budget Committee chairs Paul Ryan and Patty Murray, all but ensures that Camp must now wait for a sort of "road map" from the conference committee on what might be pursued with the Senate, perhaps under the bipartisan cover of reconciliation.

"At this juncture, it's more about putting every eye and ear on the ground ... to be focused on information gathering, and to be ready," said Steve Pruitt, a former House Democratic Budget Committee Staff Director who is now a managing partner at Watts Partners, one of the corporate and government affairs firms that has grabbed a share of the Wal-Mart lobbying budget in 2013.